Revised agricultural policy required to reform agriculture based industry

KATHMANDU: The demand for rice is increasing by five to 10 per cent each year. However, as the local production of rice is not enough to cater to growing demand, the country relies on India for both paddy and rice imports. Thanks to the Agriculture Policy, insufficient rain, irrigation problems, lack of seeds and outdated traditional technology Nepal suffers low production of rice each year. Despite being an agro-based country and claiming to grow some 1,700 various types of rice, the government has not been able to enhance the growth of paddy.

“Nepal once used to export its premium rice to India and Bangladesh. But now due to an inappropriate Agricultural Policy, every year we are having 10 per cent more import of rice and paddy,” said Chandra Krishna Karmacharya, President of the Association of Nepalese Rice Oil and Pulses Industry (ANROPI). Citing that increasing dependability on imports for food is not a good sign for the country, he said, “It is high time the government worked to revise the existing policy and upgrade local paddy

production. If not, it won’t be long before we are fully dependent on India for import of rice.”

He stressed on the need to introduce commercial farming, offering attractive incentives for farmers, facilities of irrigation and fertilisers along with the latest farming technology and market management system. Citing that Nepal has the potential for rice farming and the ability to meet demand, he said, “Due to the lack of irrigation facilities and less rain, the production is decreasing and the government should focus on these problems. Moreover, it should also introduce attractive incentives for farmers and try to retain manpower.” He further informed that the most fertile districts such as Parsa, Bara, Rautahat, Sarlahi, Saptari, Dhanusa among others have witnessed decreased rice production over previous years.

According to Karmacharya, Nepal produces enough to take care of 60 per cent of the total rice consumption while 40 per cent is imported from India. However, he said, “As of now, due to the agitation in the Tarai 90 per cent of market demand is fulfilled from imports and domestic rice mills contribute only 10 per cent.” According to him, per capita rice consumption is 100 kilograms annually.

While the domestic production of rice is decreasing by 10 per cent every year this is clearly not a healthy sign. Businessmen stated that sales have dipped by up to 30 per cent since the April 25 earthquake. “As tonnes of rice came in as relief distribution to earthquake affected areas, we witnessed a 10 per cent drop in sales in the last three months,” said Rahul Kumar Agrawal, Director of Shiv Shakti Agri Pvt Ltd. He further said that the industry faces cut throat competition for both domestic as well as imported products. According to him, there are 1,500 rice mills across the country of which 500 mills have already shut down due to tough competition.

“Power shortage is the one of the major hassles for the rice industry. The production cost increases by 10 per cent as compared to imported refined rice from India which ultimately allures businessmen to trade Indian products rather than be involved in production,” said Agrawal. He further said, “If only the government maintains smooth supply of electricity in the country, production industries will grow with more investment and competitive price.” Moreover, he said that the government should provide loans at subsidised rates for agriculture based industries and have strict quality monitoring of imported products. According to him, the government imposes five per cent duty on paddy import and eight per cent for rice imports.

Stating that industrialists are facing a tough time, Kumud Dugar, Immediate Past President of ANROPI said, “Until and unless the government does not introduce a revised Agricultural Policy and implement land reforms, it will be next to impossible to increase the domestic production of paddy.” He further said, “Due to lack of implementation of agricultural and land reforms, anyone can build houses anywhere and agricultural land is decreasing year on year.” According to him, agricultural development provides fruit in no time unlike any other sector for which the government should give priority.

Citing that the Tarai bandh has created hurdles for factories, Dugar said, “We have stock in our godown  or a month, if the situation does not ease out, the market will surely face a scarcity of food.” He also said that the market already faces price fluctuation of 10 per cent as compared to the previous month owing to the situation.

As per the industrialists, there are 25 major domestic rice mills. The demand for fine rice such as jeera and basmati are popular in urban areas while sona mansuli and other fat rice consumption is high in rural areas.